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Chief Innovation Officer Catching the Source of Innovation and Avoiding the Risk of Innovation

Updated: Oct 7, 2021

By Jian Liu, ELITE scholar


Highlights:

The Chief Innovation Officer is more an important governance model for companies to achieve systematic and sustainable innovation than an executive role as we understand it. The chief innovation officer paves the way for the creation of an innovation process within the company, and his role is crucial in large companies, help provide a common language for innovation management and a well-developed methodology for generating new ideas and evaluating innovative projects. Having a chief innovation officer can be a node for innovation decisions throughout the company. Innovation often means taking risks, especially with disruptive technologies or practices that change a company’s core functions. The Chief Innovation Officer’s main role is to minimize the risks involved in innovation or to make the transition between old and new processes as smooth as possible.


So how does the Chief Innovation Officer Change play a role in the enterprise? This article will explain the chief innovation officer from three parts: position requirement, capture creativity and risk control.


1. Requirements for the position of Chief Innovation Officer


As chief innovation officer, he first needs to have a solid technical background. The growth of companies in the digital age means that technological innovation is vital to business growth. CIO must have a strong technical background, such as working on IT projects or playing an important role in the adoption of new technologies in previous work. They should be able to speak authoritatively about new technologies for enterprise development and have a clear view of their role in our future.


The second is the diversification of thinking patterns and cooperation. Diverse experiences and diverse ways of thinking make managers better able to solve problems, especially unique problems. The diversity of ideas is the key to creativity and innovation, and the role of innovation as a bridge between product R & D, Strategy and market determine its cooperative orientation. Diverse thought patterns emerge from the collection, connection, and collaboration of creative ideas.


The third is leadership. To achieve collaboration and connectivity across business units, there needs to be sufficient leadership and charisma to understand the differences between and coordinate between complex business units. Teamwork is critical here, and the CIO must be able to drive decisions and develop new ideas, which requires leadership.



2. The Chief Innovation Officer captures the source of innovation


The Chief Innovation Officer leads the company’s efforts to find and develop new product ideas. They also worked to ensure that other executive officers recognized and supported initiatives that encouraged innovation. Typically, their background includes product development or marketing. Most importantly, they are familiar with the process of turning fresh ideas into great products. Their roadmap within the enterprise is rough as follows (Jason, 2017) :


Process: The Chief Innovation Officer is not responsible for developing the idea himself, but rather for developing and building a Process that enables others to contribute. For example, they might create an internal website where any employee can offer ideas for improving an existing product or developing a new one. They also ensure that each idea is evaluated and that the most promising proposals for further development are made. They also monitor customer feedback, service requests, and product review sites to identify recurring problems that require innovative solutions.


Sourcing: innovative ideas can come from outside the company. As a result, CIOs are in touch with universities and organizations that are researching areas of interest to the company. They may sponsor research projects or negotiate licensing agreements to use the results. Large organizations may provide facilities for start-ups or independent developers to use their product development resources to advance promising ideas.


Supporting: Chief Innovation Officer identifies projects with strong business potential and allocates the budget to test them in the marketplace. They can develop prototypes and conduct small-scale experiments in selected geographic areas or with selected customers. They use feedback from the tests to evaluate the response to the prototype and decide whether to move the project forward. If the tests provide positive feedback, they develop a business case that supports the new product and ensures that the new product has sufficient development and marketing resources to be successful.


Collaboration: To ensure that good ideas become the next generation of new products, the CTO collaborates at all levels of the organization. They work with the R & D team to ensure that their efforts reflect customer needs and innovative thinking. When ideas pass through the development phase, they work with product and marketing managers to ensure that the product enters the market as quickly as possible, allowing them to generate revenue and provide a return on investment. The Chief Innovation Officer also works closely with senior executives to ensure that innovation is aligned with the company’s strategy and is adequately funded.



3. Chief innovation officer avoids innovation risks


Companies must innovate to survive. In a recession, innovation can help turn crises into opportunities. Innovation, on the other hand, is inherently more risky in an era of volatile technological change. Rapidly changing technologies and customer expectations tend to complicate innovation, make outcomes more difficult to predict and increase the risk to innovators. Almost all innovative projects are risky, and high failure rates are common. “Sixty percent of new products die before they hit The market,” says The Innovator’s solution: Creating and Sustaining Successful Growth. Of the 40% of products that see the light of day, 40% are unprofitable. In total, 75 percent of investment in product development ends up in business failure”. The innovative “Valley of death” is shown in Figure 1. This means that effective innovation management should identify unacceptable risks as early as possible, but often only at a later stage and at a greater cost to the enterprise, the chief innovation officer needs to be quick to judge and quick to respond.



Figure1. From invention to innovation: the Valley of Death (Ford, 2011)


The chief innovation officer needs to balance the risks and benefits of this type of innovation within the company. Risk is one of the core issues of innovation, but it is often not explicitly managed. Fear of failure will discourage innovation. Accepting the possibility of failure as a daily reality is one of the defining characteristics of innovative projects. Any model of the innovation process needs to take failure as a possible outcome. Risk management can help managers make critical decisions to abandon a project, provide an effective filter for good and bad prospects, and help guide ongoing research, which is the basis for innovative projects. While companies should not pursue risk-averse strategies, better project risk diagnosis and management may help fine-tune the balance between success and failure. Wider use of explicit risk management may reduce the costs of failed innovations and accelerate project delivery; however, excessive or inappropriate risk management may hinder and stifle innovation. As a leader of the innovation strategy, Chief Innovation Officer should pay attention to how to achieve balance in the development of enterprises.


Each stage of the innovation process can be regarded as an information-gathering activity. This may involve a variety of specific actions, including prototype testing, laboratory safety testing, computer simulations, market research, investigation of potential raw materials and assessment of technical availability. The information will be reviewed at subsequent decision points, taking into account appropriate criteria. This cycle of information gathering, analysis and management actions is itself a form of risk management. However, project risk management has made this process clearer and formalized the collection and analysis of information, while acknowledging that much of the data is uncertain. The risk analysis includes estimating the likelihood that the innovation will achieve its intended objectives and identifying the remaining uncertainties that need to be addressed in the subsequent stages of the innovation process. The model in Figure 2 combines the concept of the innovation process and project risk management (Bowers, Khorakian, 2014). Models can help stimulate internal discussion and innovative practices. While decisions may result in the abandonment of innovative projects that are assessed as high-risk, the result is not always a blanket abandonment or adoption, and sometimes the result may be a recommendation to defer a decision, until more information and data are available, creating an iterative cycle of innovation.



Various risk identification techniques can be applied to the management practices of the Chief Innovation Officer. This includes checklists, causal analysis, impact maps, hazard and Operability studies. Simple, fast, and effective risk identification is support